SPRINGFIELD HIGHLIGHTS - DECEMBER 9, 2011
Friday, December 9, 2011 at 4:12PM Tax Deal Reached
After weeks of discussion and negotiation, House Revenue Chairman John Bradley and Republican Minority Leader Tom Cross reached consensus on a $344 million tax relief package that should pass the General Assembly early next week and be signed into law by Governor Quinn. Two proposals pushed by the IMA, including an extension of the Research & Development tax credit and reinstatement of the Net Operating Loss provision are included in the final language contained in SB 397. This final agreement is very similar to the measure (HB 1883) that passed the Senate last week but stalled in the House as the IMA previously reported.
The business tax incentives are contained in Amendment #6 to SB 397 and include the following items: (1) five year extension of the Research & Development tax credit, retroactive to January 1, 2011, with a five-year carry forward; (2) reinstatement of the Net Operating Loss provision with a $100,000 cap beginning on January 1, 2012; (3) five-year extension of the ethanol and biofuels tax credit; (4) extension of all credits and exemptions scheduled to sunset prior to 2014 including an increase in a tax credit for hiring veterans; (5) a change in income tax apportionment rules for the Chicago Mercantile Exchange; (6) specific EDGE tax credit packages for Sears and Champion Laboratories; (7) an increase in the Estate Tax deduction from $2 million to $3.5 million in 2012 followed by an increase to $4 million in 2013; and (8) a new pre-Broadway theatre tax credit limited to a total of $2 million annually.
On the individual side, language was filed to SB 400 that will increase the Earned Income Tax Credit from 5 to 10 percent with an annual increase in the personal exemption tied to the Consumer Price Index.
After reaching agreement, the Democrats and Republican are working on a structured roll call with each side providing a specified number of votes designed to ensure passage. The Senate previously passed a similar measure with strong bipartisan approach. The bills will be debated in the House Revenue Committee at 10:00 a.m. on Monday followed by floor action. If successful, the Senate will return to take up the legislation on Tuesday.
While the IMA is appreciative of the inclusion of the Research & Development tax credit, we were disappointed that it was only extended for five years. The IMA will continue pushing for a permanent or long-term extension of the credit to provide some certainty. In similar fashion, the IMA pushed for the full reinstatement of the Net Operating Loss retroactive to January 1, 2011 and achieved only a limited reinstatement. Finally, lawmakers ignored efforts to extend the Enterprise Zone system that will begin expiring in 2013.
The IMA appreciates the efforts of the four legislative leaders – Speaker Madigan, President Cullerton, Leader Radogno, and Leader Cross - along with Revenue Chairman John Bradley, Spokesman David Harris, and Senate Revenue Chairman Toi Hutchinson who were instrumental in the development of the package.
Court Thrown Out Challenge to New Map, Candidates File
This week a three-member panel of federal judges rejected arguments from Republicans and some minority groups who alleged that the new map for the General Assembly violated the law, specifically that it included racial gerrymandering and diluted the strength of Latino voters. While the plaintiffs can appeal the ruling, it remains a huge uphill fight to overturn the state map. With regard to the federal map that sets boundaries for Congressional districts, the panel earlier delayed the filing deadline to allow further review. These maps will guide elections for the next decade.
Hundreds of candidates running for state representative and senator filed their nominating petitions by the close of business on Monday, December 5. Petitions are currently being reviewed and some candidates will likely be knocked off the ballot for a lack of signatures or other deficiency. Click here for a current listing of all filed candidates for the General Assembly.